Poloniex Settles With US Authorities, Pays $7.6M Fee To OFAC

Poloniex LLC has agreed to pay a fee of $7.6 million to settle with the US Treasury Department’s Office of Foreign Asset Control (OFAC) for violation of sanctions.

The exchange had been scrutinized for violating multiple sanctions and not maintaining proper KYC (Know Your Customer) practices between 2014 and 2019.

The Case Against Poloniex

The Office of Foreign Asset Control announced the settlement on Monday. According to the sanctions watchdog, Poloniex’s list of sanction violations can be traced all the way back to 2014, when it operated an online trading and settlement platform. Poloniex had racked up over 65,000 violations of several sanctions programs. As a result, the exchange allowed users from sanctioned countries such as Iran, Cuba, Sudan, Crimea, and Syria to execute trades worth up to $15 million between 2014 and 2019, according to the OFAC press release. The press release stated,

“Poloniex trading platform allowed customers apparently located in sanctioned jurisdictions to engage in online digital asset-related transactions—consisting of trades, deposits, and withdrawals—with a combined value of $15,335,349, despite having reason to know their location based on both Know Your Customer information and internet protocol address data.”

No Compliance Program In Place

According to the authorities, Poloniex commenced operations in 2014. However, it did not have a sanctions compliance program in place until May 2015. Furthermore, when it put a compliance program in place, the program was not retroactive. According to documents from the Treasury Department, this allowed customers from sanctioned jurisdictions already on the platform to continue using its services.

“Although Poloniex made efforts to identify and restrict accounts with a nexus to Iran, Cuba, Sudan, Crimea, and Syria pursuant to its compliance program, certain customers apparently located in these jurisdictions continued to use Poloniex’s platform to engage in online digital asset-related transactions.”

In its report, the Office of Foreign Asset Control stated that Poloniex was a small startup when most of the alleged violations occurred. Furthermore, it stated that Circle

Go to Source to See Full Article
Author: Amara Khatri

Did you like this?
Tip BTC Newswire with Cryptocurrency